statements definition chart accounts multiple choice question

Which of the following statements is the best definition of the chart of accounts multiple choice question?

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  1. 1.

    The chart of accounts is a listing of the accounts presently having balances in the general ledger.

  2. 2.

    Some accounting software will classify some accounts as "income" accounts, while accountants might refer to these accounts as "revenue" accounts.

  3. 3.

    The digits of the account numbers assigned to general ledger accounts often have significance. For example, an account number beginning with a "1" might signify that the account is an asset account, a "6" might signify an operating expense, etc.

  4. 4. The accounts shown in the chart of accounts can be broadly classified into two categories: balance sheet accounts and

    __________

    income statement

    accounts.
  5. 5.

    Every transaction will affect how many accounts?

  6. 6. In addition to the standard chart of accounts for a specific industry, you will likely want to expand and/or modify the chart of accounts to fit your business. One tool that would be helpful in determining the accounts for your company would be your company's chart.

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1.

LO 2.1Which of these statements is not one of the financial statements?

  1. income statement
  2. balance sheet
  3. statement of cash flows
  4. statement of owner investments

2.

LO 2.1Stakeholders are less likely to include which of the following groups?

  1. owners
  2. employees
  3. community leaders
  4. competitors

3.

LO 2.1Identify the correct components of the income statement.

  1. revenues, losses, expenses, and gains
  2. assets, liabilities, and owner’s equity
  3. revenues, expenses, investments by owners, distributions to owners
  4. assets, liabilities, and dividends

4.

LO 2.1The balance sheet lists which of the following?

  1. assets, liabilities, and owners’ equity
  2. revenues, expenses, gains, and losses
  3. assets, liabilities, and investments by owners
  4. revenues, expenses, gains, and distributions to owners

5.

LO 2.1Assume a company has a $350 credit (not cash) sale. How would the transaction appear if the business uses accrual accounting?

  1. $350 would show up on the balance sheet as a sale.
  2. $350 would show up on the income statement as a sale.
  3. $350 would show up on the statement of cash flows as a cash outflow.
  4. The transaction would not be reported because the cash was not exchanged.

6.

LO 2.1Which of the following statements is true?

  1. Tangible assets lack physical substance.
  2. Tangible assets will be consumed in a year or less.
  3. Tangible assets have physical substance.
  4. Tangible assets will be consumed in over a year.

7.

LO 2.2Owners have no personal liability under which legal business structure?

  1. a corporation
  2. a partnership
  3. a sole proprietorship
  4. There is liability in every legal business structure.

8.

LO 2.2The accounting equation is expressed as ________.

  1. Assets + Liabilities = Owner’s Equity
  2. Assets – Noncurrent Assets = Liabilities
  3. Assets = Liabilities + Investments by Owners
  4. Assets = Liabilities + Owner’s Equity

9.

LO 2.2Which of the following decreases owner’s equity?

  1. investments by owners
  2. losses
  3. gains
  4. short-term loans

10.

LO 2.2Exchanges of assets for assets have what effect on equity?

  1. increase equity
  2. no impact on equity
  3. decrease equity
  4. There is no relationship between assets and equity.

11.

LO 2.2All of the following increase owner’s equity except for which one?

  1. gains
  2. investments by owners
  3. revenues
  4. acquisitions of assets by incurring liabilities

12.

LO 2.3Which of the following is not an element of the financial statements?

  1. future potential sales price of inventory
  2. assets
  3. liabilities
  4. equity

13.

LO 2.3Which of the following is the correct order of preparing the financial statements?

  1. income statement, statement of cash flows, balance sheet, statement of owner’s equity
  2. income statement, statement of owner’s equity, balance sheet, statement of cash flows
  3. income statement, balance sheet, statement of owner’s equity, statement of cash flows
  4. income statement, balance sheet, statement of cash flows, statement of owner’s equity

14.

LO 2.3The three heading lines of financial statements typically include which of the following?

  1. company, statement title, time period of report
  2. company headquarters, statement title, name of preparer
  3. statement title, time period of report, name of preparer
  4. name of auditor, statement title, fiscal year end

15.

LO 2.3Which financial statement shows the financial performance of the company on a cash basis?

  1. balance sheet
  2. statement of owner’s equity
  3. statement of cash flows
  4. income statement

16.

LO 2.3Which financial statement shows the financial position of the company?

  1. balance sheet
  2. statement of owner’s equity
  3. statement of cash flows
  4. income statement

17.

LO 2.3Working capital is an indication of the firm’s ________.

  1. asset utilization
  2. amount of noncurrent liabilities
  3. liquidity
  4. amount of noncurrent assets

Which of the following is the best definition of an account?

The correct definition of an "account" includes which of the following? A record of increases and decreases in a specific asset, liability, equity, revenue, or expense.

Which of the following statements is the best definition of an asset multiple choice question?

Which of the following statements is the best definition of an asset? Assets are resources owned or controlled by a company and that have expected future benefits.

Which of the following correctly describes a general ledger quizlet?

Which of the following describes a general ledger? The general ledger is a record containing all accounts used by a company.

Which of the following is the best definition of a source document in the accounting process?

Which of the following is the best definition of a source document in the accounting process? A source document identifies and describes transactions and is the basis for entering an event into the accounting system.

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